Dalradian reports 2017 results with year-end cash of $138 million

Published 3:00 AM ET Mon, 19 March 2018
Globe Newswire

TORONTO, March 19, 2018 (GLOBE NEWSWIRE) -- Dalradian Resources Inc. (TSX:DNA) (AIM:DALR) (“Dalradian” or the “Company”) announces results for the three months and year ended December 31, 2017, including closing cash and cash equivalents of $138 million1.

Patrick F.N. Anderson, Dalradian's President and CEO, commented: “Curraghinalt, one of the world’s best undeveloped gold projects, continues to move towards production. We are nearing completion of our infill drilling program and preparation of a resource update, which will then feed into an updated feasibility study later this year.

Our planning application to build a mine has been accepted by the government and is currently in the review and public consultation phase. There is a thorough permitting process in Northern Ireland and as part of that we expect a public inquiry to be called late in 2018. We welcome this opportunity to demonstrate to the public that we will build a safe and environmentally responsible mine that will bring jobs and investment to the local area.

Our expanded community relations team has stepped up engagement to build understanding and support for the project and our permitting team continues with preparation of additional materials to feed into the permitting process. Nearly 1,000 people have participated in our popular tunnel and site tours, which are open to the public, and we have had expressions of interest by more than 800 people in employment at our proposed mine.”

1 All amounts are in Canadian dollars unless otherwise noted

Operational highlights as of March 15, 2018

During Q4 2017, Dalradian completed work on its Environmental and Social Impact Assessment in support of a planning (permitting) application to build a mine at Curraghinalt. The Planning Application was submitted to the Department for Infrastructure of Northern Ireland on November 27, 2017.

Drilling completed to date, including all 2017 drill holes, totals 29,670 m of infill drilling in 76 holes to support the planned conversion of ounces from the inferred to indicated mineral resource category and 14,557 m in 36 holes of step-out drilling, up to 450 m beyond the existing resource envelope, to support resource growth.

In Q4 2017 and the period subsequent to year end, Dalradian reported on 20,843 m of drilling from the 40,000-metre drill program from a total of 23 step-out holes and 28 infill holes. Select results included:

Cash and cash equivalents were $138.0 million at December 31, 2017 compared with $35.7 million at December 31, 2016. Cash and cash equivalents increased this period as a result of closing a private placement previously announced on October 10, 2017. Orion Mine Finance acquired 34,013,605 common shares of the Company and Osisko Gold Royalties acquired 19,217,687 common shares of the Company, each at a price of C$1.47 per common share (the "Issue Price") for total gross proceeds of C$78.25 million.

Net loss of $1.8 million ($0.01 per share) for the three months ended December 31, 2017 compared with a net loss of $3.0 million ($0.01 per share) for the comparable period of 2016. For the 12 months ending December 31, 2017, the Company had a net loss of $7.7 million ($0.03 per share) compared to a net loss of $7.8 million ($0.03 per share) in the same period of 2016.

Expenditures on mineral property under development for the three months ended December 31, 2017 were $7.1 million compared with $3.7 million during the comparable period in 2016. During Q4 2017, permitting and drilling were the largest spending categories as work focused on finalizing the Planning Application and completing infill and step-out drilling at Curraghinalt. In Q4 2016, much of the activity centered on studies for the feasibility study and the Underground Program.

During the year ended December 31, 2017, expenditures on mineral property under development, net of $5.4 million proceeds received from processing of mineralized material during Q1 2017, were $19.5 million compared with $23.3 million during the comparable period in 2016.

As of March 15, 2018, Dalradian had 355,493,448 Common Shares issued and outstanding.

Outlook

Now that the Planning Application has been submitted, progressing to production at Curraghinalt is the Company’s primary goal and will be advanced in 2018 through drilling, engineering and geological studies, and environmental and permitting activities. The Company expects to release a mineral resource update during Q2 2018, followed by an updated FS during Q3 2018.

The 2018 work program is expected to include up to 14,000 metres of step-out drilling at the Curraghinalt deposit, up to 10,000 m of regional drilling and continued exploration of the Company’s large land package through sampling across the licence areas. Permitting activities will include preparation and submission of applications for ancillary permits and consents and expanded stakeholder relations activities to support the Planning Application.

The budget for 2018 is approximately $49 million for all operational activities in Northern Ireland and Canada, including general and administrative costs. Drilling/Geology and Permitting/Community Relations will utilize 50% of the operational budget, with planned expenditures roughly similar for the two areas. Mine planning and engineering work to produce the FS update is the third-largest component at approximately 10% of the overall budget.

Working capital at December 31, 2017 was approximately $132 million. This financial strength supports 2018 plans to continue exploration and other work to increase the value of Curraghinalt, while simultaneously moving the project through the permitting process.

Supporting Documents

The 2017 year-end Financial Statements (not including notes) can be found below. The full 2017 Management Discussion and Analysis and Financial Statements are available on www.dalradian.com and on www.sedar.com.

Consolidated Statement of Financial Position

(Expressed in Canadian dollars)

As at Dec. 31, 2017

As at Dec. 31, 2016

ASSETS

Current assets:

Cash and cash equivalents

$

137,963,176

$

35,719,242

Amounts receivable

651,345

666,166

Prepaid expenses and other assets

685,335

506,785

139,299,856

36,892,193

Non-Current assets:

Restoration deposit

1,057,930

1,032,135

Property, plant and equipment

166,346,572

118,988,157

Exploration and evaluation assets

4,600,521

3,943,077

172,005,023

123,963,369

$

311,304,879

$

160,855,562

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:

Accounts payable and accrued liabilities

$

7,139,710

$

4,908,196

Provision for reclamation

356,181

347,844

7,495,891

5,256,040

Non-Current liabilities:

Provision for reclamation

695,401

679,124

Shareholders’ equity:

Share capital

359,737,165

195,974,511

Warrants

47,760

10,745,550

Contributed surplus

15,146,358

12,314,675

Accumulated deficit

(71,817,696

)

(64,114,338

)

303,113,587

154,920,398

$

311,304,879

$

160,855,562

Consolidated Statement of Loss and Comprehensive Loss

(Expressed in Canadian dollars)

Year ended Dec. 31, 2017

Year ended Dec. 31, 2016

Operating expenses:

Salaries and related benefits

$

3,266,088

$

3,119,915

Professional fees and consulting

908,758

1,145,288

Share-based payments

2,038,951

1,094,623

Investor relations and travel

930,017

1,061,043

Office, regulatory and general

1,044,007

762,423

Interest and bank charges

14,350

11,454

Depreciation

4,606

4,606

Foreign exchange (gain) loss

(17,462

)

809,272

$

8,189,315

$

8,008,624

Interest income

485,957

188,174

Loss and comprehensive loss for the year

$

(7,703,358

)

$

(7,820,450

)

Loss per share – basic and diluted

$

(0.03

)

$

(0.03

)

Consolidated Statement of Shareholders’ Equity

(Expressed in Canadian dollars)

Year ended Dec. 31, 2017

Year ended Dec. 31, 2016

Share capital:

Balance, beginning of year

$

195,974,511

$

162,680,450

Common shares issued

103,382,473

220,932

Warrants exercised

58,971,908

30,869,137

Share-based payments exercised

1,408,273

2,203,992

Balance, end of year

$

359,737,165

$

195,974,511

Warrants:

Balance, beginning of year

$

10,745,550

$

15,019,060

Warrants exercised

(9,133,252

)

(4,229,727

)

Warrants expired

(1,564,538

)

(43,783

)

Balance, end of year

$

47,760

$

10,745,550

Contributed surplus:

Balance, beginning of year

$

12,314,675

$

12,533,961

Increase from share-based payments

2,342,419

1,183,623

Warrants expired

1,564,538

43,783

Share-based payments exercised

(1,075,274

)

(1,446,692

)

Balance, end of year

$

15,146,358

$

12,314,675

Accumulated deficit:

Balance, beginning of year

$

(64,114,338

)

$

(56,293,888

)

Loss and comprehensive loss for the year

(7,703,358

)

(7,820,450

)

Balance, end of year

$

(71,817,696

)

$

(64,114,338

)

Total shareholders’ equity

$

303,113,587

$

154,920,398

Consolidated Statement of Cash Flows

(Expressed in Canadian dollars)

Year endedDec. 31, 2017

Year ended Dec. 31, 2016

Cash flows from (used in) operating activities:

Loss and comprehensive loss for the year

$

(7,703,358

)

$

(7,820,450

)

Items not affecting cash:

Unrealized foreign exchange loss on cash

108,517

1,164,808

Interest income

(485,957

)

(188,174

)

Depreciation

4,606

4,606

Share-based payments

2,038,951

1,094,623

Unrealized foreign exchange (gain) loss on restoration deposit

(25,795

)

236,795

Change in non-cash operating working capital:

Amounts receivable

135,826

188,603

Prepaid expenses and other assets

(172,297

)

(14,663

)

Accounts payable and accrued liabilities

(727,825

)

1,529,526

Cash flows used in operating activities

$

(6,827,332

)

$

(3,804,326

)

Cash flows from financing activities:

Net proceeds from common shares issued

$

77,824,069

$

-

Exercise of warrants

49,838,656

26,639,410

Exercise of share options

332,999

757,300

Cash flows from financing activities

$

127,995,724

$

27,396,710

Cash flows from (used) in investing activities:

Expenditures on exploration and evaluation assets..

$

(521,794

)

$

(24,810,417

)

Additions to property, plant and equipment

(17,726,240

)

(5,410,717

)

Minco acquisition transaction costs

(933,934

)

-

Interest received

366,027

189,901

Cash flows used in investing activities

$

(18,815,941

)

$

(30,031,233

)

Net change in cash and cash equivalents

$

102,352,451

(6,438,849

)

Cash and cash equivalents, beginning of year

35,719,242

43,322,899

Effect of exchange rate fluctuations on cash held

(108,517

)

(1,164,808

)

Cash and cash equivalents, end of year

$

137,963,176

$

35,719,242

About Dalradian Resources Inc.

Dalradian Resources Inc. is a mineral exploration and development company that is focused on advancing its high-grade Curraghinalt Gold Project located in Northern Ireland, United Kingdom. The Curraghinalt Project is in permitting, with exploration ongoing to build on the positive feasibility study released in January 2017.

This press release contains “forward-looking information” which may include, but is not limited to, statements with respect to future financial or operating performance of the Company and its subsidiaries and its mineral project, the future price of metals, test work and confirming results from work performed to date, the estimation of mineral resources and mineral reserves, the realization of mineral resource and mineral reserve estimates, the timing and amount of estimated future production, costs of production, capital, operating and exploration expenditures, costs and timing of the development of new deposits, costs and timing of future exploration, requirements for additional capital, government regulation of mining operations, environmental risks, reclamation expenses, title disputes or claims, limitations of insurance coverage, the timing and possible outcome of pending regulatory matters and the realization of the expected production, economics and mine life of the Curraghinalt gold deposit.

Often, but not always, forward-looking statements can be identified by the use of words and phrases such as “plans,” “expects,” “is expected,” “budget,” “scheduled,” “estimates,” “forecasts,” “intends,” “anticipates,” or “believes” or variations (including negative variations) of such words and phrases, or state that certain actions, events or results “may,” “could,” “would,” “might” or “will” be taken, occur or be achieved.

Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made and are based on various assumptions, such as continued political stability in Northern Ireland, that permits required for Dalradian’s operations will be obtained in a timely basis in order to permit Dalradian to proceed on schedule with its planned exploration and mine development, construction and production programs, that skilled personnel and contractors will be available as Dalradian’s operations commence and continue to grow towards production and mining operations, that the price of gold will be at levels that render the Dalradian’s mineral project economic, that the Company will be able to continue raising the necessary capital to finance its operations and realize on mineral resource and mineral reserve estimates and current mine plans, that the assumptions contained in the Company’s Technical Report dated January 25, 2017 are accurate and complete and that a permitting application for mine construction will be approved .

Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Dalradian to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others, general business, economic, competitive, political and social uncertainties; the actual results of current and future exploration activities; the actual results of reclamation activities; conclusions of economic evaluations; meeting various expected cost estimates; changes in project parameters and/or economic assessments as plans continue to be refined; future prices of metals; possible variations of mineral grade or recovery rates; the risk that actual costs may exceed estimated costs; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes and other risks of the mining industry; political instability; delays in obtaining governmental approvals or financing or in the completion of development or construction activities, as well as those factors discussed in the section entitled “Risk Factors” in the Company’s Annual Information Form for the year ended December 31, 2017 dated March 15, 2018.

Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Forward-looking statements contained herein are made as of the date of this press release and the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or results, except as may be required by applicable securities laws. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.